Former Medtronic Employee Must Testify in Infuse Shareholder Lawsuit

A federal judge overseeing a lawsuit filed on behalf of Medtronic Inc. shareholders has ordered a former employee to testify at trial. The lawsuit alleges that Medtronic’s illegal promotion of its Infuse bone graft product caused the company’s stock to tank.

According to a report from Law360, the unnamed ex-Medtronic employee is known only as CW2 in court filings. The employee tried to avoid testifying and refused to turn over a key Infuse document, citing his 5th amendment protection against self incrimination. But in a ruling issued yesterday, U.S. District Judge Paul A. Magnuson affirmed a magistrate judge’s order for the witness. In doing so, Judge Magnuson said the decision to sign a declaration in support of one of Medtronic’s earlier court filings disqualified him from such protection.

The witness was subpoenaed in August 2011 to produce 8 Medtronic documents regarding “spine fusion technique,” “technical training,” “bone graft technique,” “clinical studies” and “bone graft products,” according to a report from MassDevice.com. He has testified on Medtronic’s behalf in this lawsuit, as well as in other Infuse-related cases.

Approved in 2002, Medtronic’s Infuse bone graft is made from a genetically engineered material called rhBMP-2 (recombinant human Bone Morphogenetic Protein-2), which stimulates bone growth. It was only cleared by the U.S. Food and Drug Administration (FDA) for use in one type of spine surgery called anterior approach lumbar fusion, and two types of dental surgeries. Many patients, however, have received Infuse in ways that were not FDA-approved (off-label use). While doctors are free to use approved medical devices in anyway they see fit, it is illegal for device makers to promote those uses. In July 2008, the FDA warned that Infuse and similar bone growth products had caused serious, sometimes life threatening complications, when used in off-label in spinal procedures.

The shareholder lawsuit was filed by the Minneapolis Firefighters’ Relief Association and other institutional investors, who in 2009 alleged in an amended complaint that Medtronic had deliberately promoted the Infuse system for off-label uses and failed to disclose that its sales were largely dependent on unapproved uses. According to the complaint, Medtronic stock plunged 13 percent after it was forced to reveal that the U.S. Department of Justice was investigating the alleged off-label promotion of Infuse.

“Medtronic and its stable of highly paid doctor-consultants recklessly downplayed the safety risks of Infuse – especially in off-label procedures – and that Medtronic’s improper off-label marketing and revenue growth were directly tied to a troubling and financially dangerous rise in safety concerns linked to Infuse, including ‘potentially serious, and even deadly, adverse events, particularly in the cervical spine,'” the lawsuit claims.

The shareholder complaint is just one of several lawsuits Medtronic faces over Infuse, which has been mired in controversy for the past several years. Over the summer, The Spine Journal raised serious questions about the validity of the research that was used to gain FDA approval of Infuse. In November, a prominent researcher warned that Infuse may be associated with a higher risk of developing cancer. In addition to the U.S. Justice Department, the U.S. Senate Finance Committee and the California attorney general are also investigating Infuse.